Is the Emergency Room More Expensive Than the Doctor's Office?

It depends on whom you ask.

The Senate committee working on health care legislation is waiting for estimates from the Congressional Budget Office on the cost of government-run insurance. Proponents of a public plan are arguing that under the status quo, too many patients resort to emergency services for relatively minor problems because they're uninsured. This makes the whole system much more pricey, they say—a complaint that dates back at least to the early 1990s, when then-President Bill Clinton referred to emergency departments as "the most expensive place of all." Is E.R. care really so costly?

It's hard to know. There's no consensus among health economists about the relative costs of a trip to the emergency room and a regular visit to the doctor's office. But many researchers point to two competing studies of the issue, both published in 1996. One major paper, published in the New England Journal of Medicine, found that the cost of care in emergency departments ends up being pretty low and that there's no great economic incentive in diverting nonurgent cases to private physicians' offices. But another study, published in the journal Medical Care, found that E.R. outpatient visits in California cost on average three times as much as an outpatient visit in a nonemergency unit.

How did the two studies come to such different conclusions? Each had a different take on the fixed costs of running a hospital. The NEJM paper, by Robert Williams, argued that since the E.R. is staffed and operated around the clock, there's not much added cost to seeing a patient with a nonurgent problem. That's especially important in the middle of the night, when private doctors' offices would be closed but emergency physicians could efficiently treat a patient suffering from even a minor illness. Williams reviewed a sample of about 24,000 visits to six Michigan hospitals during 12 randomly selected weeks in 1993.

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The Medical Care article, by Anil Bamezai, found that, contrary to Williams' assumption, hospitals don't benefit from economies of scale. In other words, the fixed costs of running an emergency department do, in fact, go up with the total number of patients—and middle-of-the-night visits add to the bill. Instead of limiting his data to 12 weeks, Bamezai mined data from California hospitals' reports to the Office of Statewide Health Planning and Development across a nine-year span.

Either way, it may not be true that people tend to overuse E.R.s because they're uninsured. According to the Centers for Disease Control and Prevention, 88 percent of E.R. visits are for urgent medical needs—i.e., those that require treatment within two hours. We also know that universal health care may not necessarily lead to fewer emergency room visits overall. Despite a 2006 Massachusetts law requiring health insurance for everyone in the state, visits to the E.R. there have gone up.